Bill Ecklund

I do know the Plan is underfunded. Their UVB as of 12/31/01 was almost 5 billion dollars. I was wondering if anybody knew what happend in 2002?

Does anybody have information on the funded status of the Central States Teamsters Plan as of 12/31/02?

I have heard that they are outsourcing their delinquency collection and withdrawal liability work. Current in-house legal staff will be leaving.

Item 1 is not prohibited by ERISA sec 408©(2) since he is not a full time employee. The issue is whether or not this is prudent. Item 2 is a problem. See DOL advisory opinion letters 79-59A and 76-3. Also there are number of DOL information letters which are helpful. 2/1/91, 5/7/92, 1/7/92, and 2/16/84.

It depends on what the plan documents say. If the trustees have adopted rules and regulations providing for such penalties, and if the collective bargaining agreement does not restrict the right of the trustees to do so, then yes the trustees may impose a penalty for failure to respond. The penalty would have to be resonable and bear some relationship to the damage incurred by the fund for the delay.

1. Is this a plan for union members only, or do all of the employer's employees participate? 2. Is the Union asking for the right to annually elect to be in or out of the plan, or is the Union looking for the ability to shift some, but not all dollars from pension to health & welfare? Generally a mpp requires a fixed annual contribution (either a percentage of compensation or a fixed dollar amount) that is not subject to an annual discretionary adjustment by the employer. It is possible in the context of a union contract to create two or more classes of workers and have different contribution levels including no contributions. What I don't know is whether the employee could be allowed to switch classifications annually.

This reply is probably too late for your needs, but for future reference you can contact the International Foundation of Employee Benefit Plans at IFEBP.org and request a copy of the outline for Session #59 at the annual conference (Nov. 2000) it is entitled "Pension Fund Mergers" and has a check list of what you are looking for.

The employer has adopted a self funded medical plan which is allowed by law. It is an employee welfare benefit plan under ERISA, which means it is subject to the reporting and disclosure requirements of ERISA. Contracts with providers can be negotiated on behalf of the plan. Since it is an ERISA plan, it is exempt from the application of state insurance laws.

The laws of some states require a insurance company that is providing group medical coverage to offer a conversion policy when COBRA coverage runs out. You should check with the insurance commissioner of your state to find out if such a law exists in your state. In addition some states offer a state sponsored health insurance program for those that don't qualify otherwise for insurance. Again you should check with the insurance commissioner of your state.

In the benefits field, a "controlled group of corporations" usually refers to corporations (defined in IRC section 1563(a)) which are aggregated together for such things as applying discrimination rules, determining withdrawal liability, coverage rules, etc. They are corporations whose employees are treated as being employed by one employer, by reason of being brother-sister or parent-subsidiary corportions (see sec. 1563 for the technical requirements). "Multiple Corporations" may include a controlled group of employers, but doesn't have to. A "multiple employer plan" is a plan to which more than one employer contributes. The coprorations may or may not be related. A "multiemployer plan" is a plan to which more than one employer contributes by reason of a collective bargaining agreement. Different employer ID numbers would be expected to occur and do not have anything to do with the definition.

The IFEBP conducts a Trustees and Administrators Insitute June 10-13 in Lake Tahoe. They do this twice a year, once in Feb in Florida and once in June usually in Lake Tahoe. If you need basic background, I would suggest signing up for the New Trustees Institute. You will get 2 and 1/2 days of pretty instensive training, covering health & welfare and pension. Despite its name, there are admininstrators that attend the New Trustees Institute as well as the Administrators Institute.

I can't comment on the open enrollment issue, but under the ADEA, an employer does not have to provide the same benefits to retirees that it provides to emplyees, but once it does provide benefits to retirees, the EEOC's position is that the employer may not discriminate against classes of retirees based on age. For example the EEOC would take the position that it is not permitted to provide lower benefits once the retiree reaches age 65.

Under the ADEA, an older employee who chooses to participate in a voluntary plan can be required to pay more for the benefit, but only if the employee does not pay a greater percentage of his/her premium cost than younger employees do. (see EEOC compliance manual sec 3, III A. 5.) In other words, if the health premium is age rated, the employee can be required to pay a greater amount as a co-pay, as long as it is not a greater percentage than a younger employee

Need more facts to give a definitive answer; however check out DOL opinion letter 99-03A. If your facts fit within the parameters of that opinion, you may be ok.

Guidry had worked out a deal with the Local 9 plan which he had embezzled from, but he was a beneficiary of two other plans, the Business Agents and Councils Plan and the National Pension Fund Plan. He didn't owe them any money. These two plans argued that by his "bad boy" acts he had forfeited his right to a pension benefit, or in the alternative a "constructive trust" should be imposed on his benefit. The District Court rejected the forfeiture argument, but accepted the constructive trust theory as did the Circuit Court. The Supreme Court "acknowledged" that the forfeiture theory didn't work and also rejected the constructive trust theory.

Guidry had embezzled money from his union and from two local plans (pension and health & welfare) that he was a trustee of. The issue before the Supreme Court was whether a constructive trust could be imposed upon his pension benefits to satisfy the Union's judgement. The court determined that a constructive trust could not be imposed. However in the lower court, two of the three pension plans that he was entitled to receive benefits from had argued that Guidry has forfeited his rights to his pension benefit. The District Court ruled that he had not, but that a contructive trust could be imposed. Following the loss of the Supreme Court case, the Union then waited until Guidry actually received his pension check and then garnished that. That started a whole new round of cases with Guidry arguing that the anti-alienation provisions of the law also applied to that intended garnishment. Guidry lost that case. The matter was appealed to the 10th Circuit, Guidry lost again and the U.S. Supreme Court refused to grant cert. An interesting twist was the fact that Colorado's garnishment laws were found not to have been preempted and those laws currently do not allow the garnishment of pension benefits. I don't think that the exception provided in 401(a)(13)© (which references violations of Part 4 of subtitle B of title I) will work in your case. That only applies to breaches of fiduciary duty and your contributing employer is not a fiduciary to the plan. In addition, failing to make contributions is a violation of ERISA section 515, which is not part of part 4, it is part of part 5. One suggestion would be to check ou the garnishement laws of your state, and have the sheriff show up every time a pension check is delivered.

You may not offset. See Guidry V. Sheet Metal Workers National Pension Fund, 11 EBC 2337, a U.S. Supreme Court Case dated 1/17/90